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Facebook's Covid relief for small businesses finally arrives

Peter Griffin, Contributor. 11 March 2021, 9:49 am

It was a significant gesture, made as restaurants and retailers around the world shut their doors as lockdown restrictions took effect.

On March 17, 2020, Facebook said that it would be offering US$100 million in cash and advertising credits to 30,000 small businesses in 30 countries that use its platform to advertise. 

That support finally reached New Zealand businesses this week, nearly a year later and well after it could have had a material effect for businesses grappling with the impacts of the pandemic.

The New Zealand Herald this week reported that 60 unnamed Auckland-based businesses had received the support, which amounted to $400,000. 

The cash grants have been paid, but the advertising credits are still to be applied. As Wellington-based Aro Digital managing director Tim Dorrian told the Herald, that's poor form given that by July last year, Google had issued US$340 million in advertising credits to small and medium-sized businesses as part of its Covid support package for customers.

Aro Digital didn't even qualify for support from Facebook, given the arbitrary terms of the competition requiring that only Auckland-based company with between 2 and 50 employees apply.

The support was slow in coming in other countries as well, which Facebook blamed on the overwhelming number of applications for it. 

As one entrepreneur told the London Times in July last year: "To get cash and credits at this time is gold dust. It was a great prospect a few months ago when I applied . . . but no one has got anything." 

Facebook ad costs dove during Covid

More significant to digitally savvy small business during the pandemic would have been the fact that the economic fallout from the pandemic pushed down the advertising rates on the platform by 15 - 20% in early and mid-2020. That would have allowed businesses to more cheaply reach an audience increasingly surfing the web from lockdown.

Prices have rebounded since then. But Facebook's support for small businesses seems inconsequential compared to the size of its business and its level of profitability. After all, Facebook brushed off a boycott by large advertisers last year as it pointed out that most of its revenue on the platform comes from millions of small businesses that collectively spend billions of dollars all over the world advertising to reach Facebook users.

Australian small businesses, which received $3 million as part of the support package also had to deal with the fallout of last month's Australian news ban on the platform which saw many small business Facebook pages inadvertently deleted as well. The news ban was lifted and all pages were later restored as Facebook won concessions from the Australian Government in the News Bargaining Code.


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